Direct Marketing Association, The v. Huber
Filing
77
REPLY to Response to 71 Amended MOTION to Exclude Testimony of Plaintiff's Expert Witnesses F. Curtis Barry, Thomas Adler, and Kevin Lane Keller filed by Defendant Roxy Huber. (Attachments: # 1 Exhibit Exh K, Gable Rep and Ex, # 2 Exhibit Exh L, Keller Dep Cites, # 3 Exhibit Exh M, Keller Dep Cites)(Snyder, Melanie)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 10-cv-01546-REB-CBS
The Direct Marketing Association,
Plaintiff,
v.
Roxy Huber, in her capacity as Executive Director, Colorado Department of Revenue,
Defendant.
DEFENDANT'S REPLY IN SUPPORT OF HER MOTION TO EXCLUDE THE
TESTIMONY OF PLAINTIFF'S EXPERT WITNESSES F. CURTIS BARRY, KEVIN
LANE KELLER, AND THOMAS ADLER
Defendant, Roxy Huber in her capacity as Executive Director, Colorado
Department of Revenue (the "Department"), submits the following reply in support of her
motion to exclude all testimony whether by declaration, deposition excerpt, or live
testimony of Plaintiff's expert witnesses F. Curtis Barry, Kevin Lane Keller, and Thomas
Adler pursuant to Federal Rule of Evidence 702 (“702 Motion”), filed December 20,
2010, (Dkt #71).
I.
THE EXPERT OPINIONS OF F. CURTIS BARRY DO NOT MEET BASIC
RELIABILITY STANDARDS UNDER RULE 702.
As outlined in Defendant’s 702 Motion, the opinions of Mr. Barry are not reliable
because they are not based on sufficient facts or data. Plaintiff does not contest that
Mr. Barry did not consult any published materials or perform detailed calculations in
determining the amount of costs that DMA members will allegedly incur in complying
1
with the Act. Rather, Plaintiff’s Response admits, for example, that Mr. Barry offered
opinions as to the rate of costs “without needing to look them up.” Pl. Resp, p.7.
The only authority on which Plaintiff relies is Kumho Tire, which considered the
admissibility of technical expert testimony, including testimony based on an expert’s
experience. Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999). The Court held that
although experience-based testimony may be admissible, trial courts must determine
“whether the testimony has a reliable basis in the knowledge and experience of the
relevant discipline.” Id. at 149 (internal citations omitted). The Court ultimately upheld
the determination of the district court that the testimony was not reliable because the
party offering the expert failed to demonstrate that other experts in the industry followed
the same methodology and the record did not include any published articles or papers
validating the experts’ approach. Id. at 157. As the Court pointed out, “nothing in either
Daubert or the Federal Rules of Evidence requires a district court to admit opinion
evidence that is connected to existing data only by the ipse dixit of the expert.” Id.
(internal citations omitted).
Plaintiff’s Response asserts that Defendant’s expert on the issue of compliance
costs, Mr. Dieter Gable, followed a comparable methodology. This is not accurate. Mr.
Gable’s cost calculations were based on a number of verifiable sources, including U.S.
Department of Labor, Bureau of Labor Statistics, published industry salary guides,
published research regarding the top 500 internet retailers, and other published
research. Exh. K, Dieter Gable Report and exhibits to same, pp.3-5. Mr. Gable also
performed detailed cost calculations. Id. at pp.17-20.
2
In its Response, Plaintiff further continues to misconstrue the opinions of Mr.
Gable, contending that Mr. Gable concluded that retailers will each face several
thousand dollars in compliance costs. Pl. Resp., p.3. This is a gross
mischaracterization of Mr. Gable’s opinions. Mr. Gable’s primary opinion is that of the
relatively small number to retailers subject to the Act, the majority would not incur any
significant costs to comply with the Act. Exh. K, Gable Report, pp. 5-10. Large retailers
will not incur any measurable costs given their economies of scale, and smaller retailers
will be able to rely on their outside vendors to provide compliance with the Act. Id. at
pp.8-10. Mr. Gable’s estimated costs apply only to “the worst-case scenario” – the
smallest affected retailers. Id. at pp.11, 17-20.
Plaintiff’s emphasis on Mr. Gable’s opinions is a diversion, however, from the
primary issue at hand – the lack of reliable methodology employed by Mr. Barry.
Plaintiff’s Response is notable in that it does not address the numerous specific
instances pointed out in Defendant’s 702 Motion where Mr. Barry ballparked figures “in
his head,” rather than relying on specific data. Courts have routinely held that expert
opinions must be based on more than general experience. See, e.g., Callaway Golf Co.
v. Dunlop Slazenger Group Americas, Inc., 2004 WL 1534786, at *4 (D.Del. 2004)
(excluding expert testimony when the expert’s estimate of unjust enrichment was
“based solely on his personal knowledge and experience rather than any methodology,
analysis, or factual support.”).
Given Mr. Barry’s failure to rigorously assess the alleged costs at issue with
reference to any specific data, this Court should refuse to admit his opinions.
3
II.
DR. ADLER’S SURVEY METHODOLOGY WAS FLAWED, YIELDING
UNRELIABLE DATA UPON WHICH NO RELIABLE OPINION, INCLUDING
THAT OF PROFESSOR KELLER, COULD BE BASED.
Plaintiff argues that the survey met the seven requirements for admissibility
articulated in Hodgdon Power v. Alliant Techsystems, Inc., 512 F. Supp. 2d 1178, 1181
(D. Kan. 2007). 1 The survey, however, did not comply with three of those requirements.
A. The Survey Questions Were Not Framed in a Clear, Precise and Nonleading Manner.
First, Plaintiff’s survey, and thus the opinions of Dr. Adler and Professor Keller,
fails to satisfy the third Hodgdon Power factor – that the questions were framed in a
clear, precise, and non-leading manner. Question 18 contained false information, which
likely led to survey respondents' misunderstanding and led them to the answer Plaintiff
sought. It contained the suggestion that the Department would have information about
the products a consumer purchased. It asked if the respondent minded the State
knowing the kinds of products the respondent purchases. Because retailers are
prohibited from supplying specific product information to the Department, that question
was clearly misleading and designed to lead a respondent to the obvious answer, as
few people want a government to know the details of their spending habits. As
explained in Dr. Lichtenstein’s report, the fact that the survey otherwise accurately
described the Law does not cure the defect in this question. Exh. G, Lichtenstein Decl.
and Report, pp.17-18.
1
See also Pittsburgh Press Club v. United States, 579 F.2d 751, 758 (3d Cir 1978) (discussing
circumstantial guarantees of trustworthiness of surveys if they are conducted in accordance with
generally accepted survey principles and listing the factors that must be examined when determining if a
survey meets those generally accepted principles, citing The Judicial Conference Study Group,
Handbook of Recommended Procedures for the Trial of Protracted Litigation, 25 F.R.D. 351, 429
(1960),containing factors similar to those articulated in Hodgdon Power).
4
B. Sound Survey Procedures Were Not Used.
Plaintiff’s expert testimony is also flawed because their survey did not meet the
fourth Hodgdon Power factor – that sound interview/survey procedures were followed.
The answers available to Respondents did not include a "don't know" or "no opinion"
option, which is a classic alternative in consumer surveys Id, pp.24-27). Additionally,
as pointed out in Defendant's Motion, the survey did not provide sufficient contextual
information with its questions. Id. at pp.23-24.
2
The survey questions themselves also suggested a response by emphasizing
and repeating the mantra of privacy and privacy concerns creating a "reactivity bias,"
thus putting something -- here a concern about privacy -- in the respondents’ minds and
predisposing them to consider and react to it. Id. at pp.21-22.
Moreover, the survey was not designed to address causality because of the
confound of tax avoidance and the corollary increase in price caused thereby, which Dr.
Adler recognized. Exh. F, Adler Dep. 137:15-23; Exh. E, Adler Dep. Exh. 92, p.4. This
confound was not covaried out of the results, contrary to sound survey procedures.3
Plaintiff’s Response does not address these serious shortcomings.
C. Objectivity of the Process Was Not Ensured.
Finally, the work of Plaintiff’s experts does not satisfy the seventh Hodgdon factor
- ensuring the objectivity of the process. A most important element in the process'
objectivity is the independence of the survey and its designer from the attorneys
2
This fault can also be considered as a failure to frame the questions in a clear and precise manner.
This problem can also be expressed as a failure to analyze the gathered data in accordance with
accepted statistical principles, another of the Hodgdon factors
3
5
involved in the litigation. Pittsburgh Press, 579 F. 2d at 758. For example, courts have
recognized that sample designers should be unaware of the purposes of the survey. Id.
Here, Plaintiff's attorneys were intimately involved in the survey process as
detailed in Defendant's 702 Motion. See 702 Motion, pp.10-11 and n.9. Numerous
emails and phone conversations were exchanged between Dr. Adler and counsel
discussing the substance of the survey questions, an exchange which should have
been avoided. United States v. S. Indiana Gas & Electric Co., 258 F. Supp. 884, 894
(S.D. Ind. 2003) (finding such multiple exchanges improper). Counsel was involved in
designing the questions asked, which also is improper. Boehringer Ingelheim G.m.b.H.
v. Pharmadyne Laboratories, 532 F. Supp. 1040, 1058 (D.N.J. 1980) (survey excluded
in part because of counsel's involvement in designing questions).
Also, Dr. Adler was well informed of the litigation as demonstrated by his notes of
conversations with counsel. Exh. E, Adler Dep. Exh. 92, p.3. And Professor Keller,
who opined based on the survey, was made aware of the litigation and Plaintiff's
position and goals for the survey in conversation with counsel, (Exh. J, Keller Dep. Exh.
17, p. 7; Exh. L, Keller Dep. 67:4 - 8, 73:2 - 80:8) and by reading the complaint. Ex. M,
Keller Dep. 81:9 - 83:17. This "makes the consultants an extension of the legal team
rather than outside objective experts, . . . ." S. Indiana Gas & Electric, 258 F. Supp at
894, thus running afoul of sound survey procedures and not ensuring the objectivity of
the process.
Plaintiff only addresses the problems caused by counsel’s involvement with the
survey in a footnote in its Response, calling Defendant's concern "nonsense." As
6
demonstrated above, however, courts look unfavorably when an attorney is closely and
consistently involved in designing a survey and advising the consultants concerning the
litigation. While a business or government agency may certainly be closely involved in
a survey, as Dr. Adler claims is routine (Pltf. Response, n.5), as shown above, the rule
is different when a survey is used for evidence in a litigation context.
Plaintiff's argument is simply that because Dr. Adler testified that the questions
were proper and clearly and precisely framed in a non-leading manner, that sound
survey procedures were followed, and that the data were analyzed in accordance with
accepted statistical principles, then such is so. However, the analysis of Dr.
Lichtenstein as articulated in the Defendant's 702 Motion shows persuasively otherwise.
WHEREFORE, for the foregoing reasons the Court should exclude the testimony
of Plaintiff's expert witnesses F. Curtis Barry, Thomas Adler and Kevin Lane Keller.
Respectfully submitted this 24th day of January, 2011.
JOHN W. SUTHERS
Attorney General
s/ Stephanie Lindquist Scoville
STEPHANIE LINDQUIST SCOVILLE*
Senior Assistant Attorney General
Civil Litigation and Employment Law Section
Attorneys for State Defendants
1525 Sherman Street, 7th Floor
Denver, Colorado 80203
Telephone: 303.866.5241
FAX: 303.866.5443
E-Mail: stephanie.scoville@state.co.us
7
MELANIE J. SNYDER, 35835*
Assistant Attorney General
JACK M. WESOKY, 6001*
Senior Assistant Attorney General
Business & Licensing Section
1525 Sherman Street, 7th Floor
Denver, Colorado 80203
Telephone: (303) 866-5273 (Snyder)
Telephone: (303) 866-5512 (Wesoky)
FAX: (303) 866-5395
E-Mail: melanie.snyder@state.co.us
E-Mail: jack.wesoky@state.co.us
*Counsel of Record
8
CERTIFICATE OF SERVICE
I hereby certify that on January 24, 2011, I electronically filed the foregoing
DEFENDANT’S REPLY IN SUPPORT OF HER MOTION TO EXCLUDE THE
TESTIMONY OF PLAINTIFF'S EXPERT WITNESSES F. CURTIS BARRY, KEVIN
LANE KELLER, AND THOMAS ADLER with the Clerk of the Court using the CM/ECF
system which will send notification of such filing to the following e-addresses:
gissacson@brannlaw.com
mschafer@brannlaw.com
Attorney for Plaintiff
s/ Melanie J. Snyder
9
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?